from the this-is-not-theft dept

For many years we've talked about the kind of derangement that happens among many -- especially among those working for Homeland Security's Customs and ICE divisions -- considering the supposed "dangers" of counterfeit goods. Over and over again we've pointed to studies that have shown that the "harm" of counterfeits is massively overblown. And these are not just random studies picked out of a hat. Both the Government Accountability Office (GAO) and the OECD have put out studies on this. When you look at the details, you quickly learn that while there are a few cases of people tricked by counterfeit goods -- and a vanishingly small number of cases where people are put at risk due to counterfeits -- in many, many cases, no one is actually losing out due to counterfeits. They are frequently an aspirational buy. That is, the buyer knows they're buying a counterfeit good, but are doing so because they so appreciate the real version, but can't afford it. And studies show that buyers of counterfeits quite frequently buy the real deal later when they're able to afford it. Thus, counterfeits often act as marketing for the original.

But, for whatever reason, Homeland Security likes to play up the "threats" of counterfeits and makes lots of noise about how many counterfeit things it seizes at the border every year (or... not at the border -- such as the time it raided a lingerie store to get "counterfeit" panties advertising sports teams). And sure, Homeland Security really really wants you to believe it's protecting the public with this kind of thing.

But if that's the goal, explain this story. Harper Reed tried to buy a fancy Rimowa luggage on Amazon last year. There was no indication that it was counterfeit -- it was priced the same as actual Rimowa luggage. But customs intercepted the shipment and wouldn't let it in. That's fair enough, I guess, but it's the next part that's shocking. Because of this Customs refused to renew Reed's Global Entry membership. Global Entry, for those who don't know, is a process by which fliers who frequently travel internationally can fill out a form, go for an interview, pay some money... and be able to speed through customs upon re-entering the US. While some grumble about paying for access, it's actually a more reasonable security program than most -- in that it actually involves effectively pre-clearing people less likely to need scrutiny at the border.

But Reed's status was not renewed because he was listed as trying to "import counterfeit goods." Again, you can see the intent behind this rule. If someone is actually "importing" a bunch of counterfeit goods to sell, you can see how that might be a good reason to deny someone Global Entry. But Reed wasn't trying to import a bunch of counterfeit goods. He was trying to buy a suitcase. He didn't get it from Amazon (he bought one later from a store) and that's fair enough under the law -- but why hold that against him.

Apparently the geniuses at Homeland Security have little desire to distinguish a counterfeiting operation from a dude buying something on Amazon he thought was legit.

When CBP intercepts a shipment, says Mark Schonfeld, an intellectual property lawyer at Burns & Levinson LLP, in Boston, Massachusetts, it sends a seizure notice to the trademark holder (in this case, Rimowa), which includes the names of the importer and exporter. The brand can then decide what action it wants to take, if any. Going after the latter party can be difficult and costly, since the vast majority of counterfeits come from Asia (in 2016, nearly 90 percent of products seized by CBP originated in China and Hong Kong). The importer, however, is by definition domestic, making them the easier target.

Schonfeld says this is the first instance he’s heard of in which a consumer has been flagged for importing a single item, but that legally, the principle is the same. “It definitely can happen to a consumer,” he says. “You know, you can go to Tijuana, just right over the San Diego border and you can easily buy counterfeits there, but no consumer should think that coming back into the United States with the item is risk free.” Much more common are cases in which Amazon itself is named as the importer, particularly since it began courting Chinese sellers with favorable shipping terms in 2015, and as its Fulfillment By Amazon program expands by leaps and bounds each year, offering third-party merchants the chance to take advantage of the e-commerce giant’s logistics infrastructure, customer service, and even Prime two-day shipping by sending goods directly to its warehouses.

Again, at the very least, it seems that intent should be taken into account here. Buying something on Amazon, with no indication (not even price) that the luggage was counterfeit, should not lead one to being accused of being a counterfeiter. But, of course, with DHS feeling so damn strongly about the "evils" of counterfeiting, it's only to be expected that they'll overreact to situations like this as well.

from the sounds-about-right dept

Facebook, which was a bit late to the party, recently released its latest transparency report. In a break from earlier versions of the report, the social media giant has finally moved beyond only detailing requests for information by the government and its alphabet agencies and is now including intellectual property requests and statistics as well. There is a decent amount of information in both sections of the report, but on matters of both intellectual property requests and government information requests, an analysis of the numbers leads to some troubling conclusions.

Let's deal with the IP section first. The headline of much of the media reporting on this has been about the 377,000 or so requests Facebook got to take down content based on IP issues, with well over half of those specifically being about copyright. It's not a small number and some are using it to make the case that Facebook is Mos Eisley when it comes to copyright infringement: a hive of scum and villainy. Tragically for those arguments, the validity of those requests makes this all seem far less impactful.

Aggregate data shows Facebook received about 377,400 complaints from January through June, with many referencing multiple posts. About 60 percent of the reports related to suspected copyright violations on Facebook. A “small fraction” of requests were excluded because they were not sent through an official form, Facebook said.

The company removed user uploads in response to 81 percent of filings for counterfeiting, 68 percent for copyrights and 47 percent for trademarks, according to its report. The percentages were roughly similar for Instagram.

By my math, the copyright front shrinks from the 377k number to 150k of copyright content Facebook decided, rightly or wrongly, was valid enough to take down the content. That isn't a small number still, but it's not as daunting a number as it originally appeared, particularly when you factor in that Facebook generally sides with the disputer over the person who's content it is removing. On trademark, the numbers are much worse, with less than half of the requests being valid enough to have the content removed. The overall picture is one in which there is indeed some infringement on a site as massive as Facebook, but there is also an enormous amount of invalid requests to the site as well. Not the best look for those that think intellectual property enforcement on the site should be expanded even further.

As for government information requests, you will not be shocked to learn that they've gone up rather sharply as of late.

The ninth Facebook transparency report also showed that government requests for information about users increased 21 percent worldwide compared with the second half of 2016, from 64,279 to 78,890.

As we discuss this on the eve of the federal government looking to renew its domestic surveillance powers, it's well worth noting that any of the voices that hollered about the dangers of government spying over, say, the last eight years or so ought to be screaming at the sky, and possibly their own IoT devices, about what has only been an expansion of surveillance and privacy invasion for the general public. That the government is able to get away with this kind of one-sided action only becomes more mysterious as the actions against the public increase over time.

from the guys,-stop-this dept

We've always had difficulty understanding why copyright or trademark law should even have "criminal" components to them. It seems fairly obvious that they can be handled easily enough with civil actions, without involving law enforcement. And this matter is only reinforced every time law enforcement tries to get involved in copyright and trademark enforcement. They seem oddly... almost unable to comprehend that infringement is different than theft and that it requires a different thought process and analysis. Time and time again, we see this crop up, both in the US and around the world. And it remains consistent no matter who is in charge. Under Obama, the DOJ was terrible on intellectual property issues, and that's now carrying over to the Trump administration.

Deputy Attorney General Rod Rosenstein just gave a talk at the Interpol International Law Enforcement IP Crime Conference -- which, as you can imagine, is not a place where nuanced discussions on infringement are expected. And Rosenstein lived down to low expectations in delivering a speech full of silly analogies and misleading statements that show little understanding of the deeper underlying issues when it comes to copyright, trademark and patents. It starts out with a particularly silly analogy:

As a child, I learned a fable about a hen that finds some wheat grains and asks other animals for help in planting them. Nobody is willing to help, so the hen does the work itself. At every stage of the process – harvesting the wheat, threshing it, milling it into flour, and baking the flour into bread – nobody wants to help. But when the work is finished, everyone wants to eat the bread.

Modern intellectual property is more complicated than baking bread, but the same fundamental principle applies. If we let some people steal things without compensating the people who produce things, the incentive to create new things will be lost.

Huh? The famed Little Red Hen story isn't about "letting some people steal things without compensation." It's got nothing to do with that. But, already we're off on the wrong foot as Rosenstein has leapt to a misleading understanding of intellectual property issues in the first place -- comparing a finite resource with an infinite one, and falling back on a silly -- and legally incorrect -- claim of "stealing."

Similarly, "the incentive to create new things will be lost" is a familiar trope, but one that is simply proven wrong time and time again by history. As we've noted, over the past twenty years or so, even as the internet has enabled ever greater piracy, it has also created an astounding revolution in new content production. The problem is that so many people assume -- incorrectly -- that the "incentive" for creation is getting the copyright, patent or trademark, rather than the many other incentives. Many of those other incentives do involve making money, but not necessarily by using intellectual property law to do so. And for many, it's not the monetary incentives that drive creation at all. Arguing that infringement decreases incentive to create is simply not borne out by history. It shows a level of ignorance that is disappointing, if not surprising, for a top DOJ official.

Intellectual property enforcement assures innovators and investors that when they devote time and money to develop new concepts and products, they will reap the financial rewards.

No, it doesn't, actually. There is no guarantee that anyone reaps any financial awards. It's not a system of welfare for creators. And, even if you make the argument that the laws themselves help structure a business model that allows the holders of the copyright, patents and trademarks (not necessarily the creators of the underlying works) that still has nothing to do with criminal enforcement. And, again, there are many, many business models that don't rely on copyright, patent or trademark law to "reap the financial rewards." Insisting that those are necessary is short sighted and misleading.

If governments fail to protect intellectual property rights, the immediate consequence will be monetary losses to individual property owners.

Not necessarily. This assumes that any infringing copy is a lost sale -- a myth that also is rarely supported by evidence.

But the long-term impact will be less investment of time and resources, and fewer innovations for society at large.

Another myth, not supported by actual data. As we noted above, even as internet piracy increased, so did the development and output of content.

This conference represents an ongoing commitment by law enforcement, industry partners, and other stakeholders from all over the world to come together and identify ways to protect intellectual property and the industries that fuel the modern global economy. These protections are critical to almost every sector of the economy, from new, life-saving drugs and medical techniques that allow us to live longer and healthier lives; to computers and software that run the devices we use to navigate the airplanes and trains and taxi cabs that brought us here today; to applications on the smartphones we use to purchase coffee.

The thing is, many in the tech industry don't want the DOJ getting into their business. They don't need "protection." They just want to innovate. The people making apps on smartphones these days are often the ones leading the charge against over aggressive enforcement of IP laws. Yet, here, Rosenstein is pretending that he represents their views.

One of our challenges is that intellectual property crime does not look like traditional crime, where the perpetrator takes a physical item directly from the victim. Everybody understands that it is wrong to walk into a business and take property without permission. In contrast, the individual act of downloading a movie from a file-sharing site, or buying a cheap knockoff of a name brand item, may seem harmless. But the accumulated economic loss from thousands or millions of those illegal transactions can destroy legitimate businesses, eliminate the incentive to invest in innovation, and undermine the rule of law.

It doesn't look like traditional crime because it's not traditional crime. And in many cases it seems harmless because it is harmless. Clearly, that's not true in all cases, but in many, it is. Many people downloading a movie would never pay for it in the first place. There's no economic loss there. Many people buying a cheap knockoff brand item, would never buy the full price item. There's no loss there. In fact, multiple studies have shown that when it comes to knockoff goods, the purchase is often an aspirational purchase. That is, they know they're buying a fake, but they buy the knockoff and end up buying the real version later, when they can afford to. In other words, knockoffs and copies often act as cheap or free marketing for more expensive products.

But Rosenstein can't even consider that as a possibility. Rosenstein's piece goes on in this vein for quite some time, and at some point there's no use debunking each and every point. The problem here is really the simplistic "law enforcement" mindset that insists that infringement is theft (it's not) and that any infringement must be bad (even though it's not) and damaging to society (even though it's not). Is it really too much to hope for officials who can actually understand the nuance related to these issues?

from the generic-defined dept

If there is a common theme that runs through much of the posts we do on trademark disputes, it's that the ultimate responsibility for them lies at the feet of a USPTO that's only too willing to grant privilege on words and terms when it should not. The examples of this abound, from a video game trademark on the term "candy" to trademarks being granted in the entertainment market for the word "live."

And now we can add to this list that the USPTO apparently granted a trademark for the restaurant industry to a company on the word "succotash." This came to light when that company, Knead Hospitality + Design, sent a cease and desist notice to Beth Barden, who runs a restaurant in Kansas City that goes by the name Succotash.

Barden learned via email that Knead Hospitality + Design filed a trademark registration for Succotash and requested she remove the trademark symbol from her website. But the D.C. company's move has bigger implications: The filing gives it the nationwide right to use that trademark in connection with bar, catering and restaurant services. If Barden wanted to expand or franchise outside the Kansas City area, she could be subject to trademark infringement, said Cheryl Burbach, a partner in Hovey Williams LLP, an Overland Park intellectual property law firm.

"All of a sudden, your name isn't yours anymore," Barden told the Kansas City Business Journal. "It's a little terrifying because clearly they have more money than I have, more opportunity to fight this thing than I do."

Now, notably, Barden's restaurant is over a decade old, while Knead Hospitality + Design came to be only in 2014. As such, Barden likely has all sorts of protections available to her via common law trademark rights. She has hired an attorney to fight the C&D... and to get Knead's registration cancelled. And that really should happen, because allowing a trademark in the restaurant industry that consists entirely of the name of a common dish is insane. So insane, in fact, that that's the reason why Barden herself never even bothered to attempt to register the trademark herself.

Barden said she never registered a Succotash trademark because she didn't think a common vegetable dish could be trademarked. Even so, Barden is considered a senior user who owns prior common law trademark rights in the Kansas City area. Knead filed its trademark application on March 14, 2015, well after Barden began using the name in Kansas City.

Her naiveté would be quite sweet, had it not led to her now having to pay an attorney to keep a trademark bully with a mark that never should have been granted in the first place at bay. Which brings us all the way back to the original point: if the USPTO can't be bothered to think about a trademark application for long enough to realize it never should have granted this particular mark, the time for new oversight is at hand.

from the there-really-were-some-good-parts dept

I kind of figured a lot of people would disagree with my post yesterday, in which I noted that the underlying idea behind what the Fine Brothers were trying to do in helping to support fans in making their own versions of the various "React" programs was actually a good idea. The point was that the idea behind it was actually pretty good. A big brand/entertainment property encouraging fans to make their own versions of their program, helping them with additional support, promoting those fan videos and helping them make money -- in exchange for a cut of the revenue -- remains a cool idea. Unfortunately, the idea came from a company that had a really bad history of overly aggressive behavior in taking down content, deleting negative comments and ridiculously and petulantly claiming that anything remotely similar to what they did was somehow unfair. The examples of them whining about Buzzfeed and Ellen having similar segments was particularly galling. On top of that, the trademarking of various terms, including the very generic "React" really pushed things in the wrong direction.

Many of you insisted that it was impossible to separate out these actions from the underlying idea of supporting fan videos -- and you're probably right. It's good to see that the Fine Brothers have now completely backed down from the plan, shutting down React World and announcing that they've decided to drop all of their trademark claims. On top of that they've agreed to drop all of their ContentID claims on YouTube. At this point, that was the only thing they really could do, and it was clearly the right move. Their history of overly aggressive behavior really made it impossible to do something else.

But... I'm hoping that people can still separate out the core idea that was there behind React World, and distance it from the fact that it was being put in place by people who had too much bad history to make it work. I still think that it would be great if other big brands recognized the value in freely supporting fans in making their own fan works, and even allowing them to monetize those works. Right now, fan homages to books, TV shows, movies and more live in a nebulous world in which, if they get too big, or even try to make any money, the companies behind the brands often shut them down completely. If you want to do something professional -- such as that big Star Trek Fan Film that is currently facing a lawsuit -- it's basically impossible. And that's a shame.

But imagine if some of these larger entities took the same approach as the key parts of the Fine Bros plan: allowing anyone to make stuff, even providing them with additional assets including tools, graphics, guidelines, etc. And then even saying that they'll help support and promote the best ones, in exchange for a cut of the profits? It could really lead to some cool new creativity from fans and more closely attach those fans to the originals. It's that underlying idea that I found intriguing from what the Fine Brothres had put together -- without recognizing how incredibly imperfect the Fine Brothers were as the individuals to deliver that message. So it's good that the Fine Brothers have recognized their past errors and backed down on basically all of their more egregious moves (not sure about their aggressive comment deletion stuff, though). But I hope that this doesn't doom any other larger entertainment property from entertaining ideas around supporting fans creating their own works, without upfront licensing fees.

from the almost-every-point-is-wrong dept

Last summer, when President Obama finally got around to nominating a new IP Czar (technically the "Intellectual Property Enforcement Coordinator" or IPEC), Danny Marti, we were at least moderately hopeful that he didn't come out of the usual copyright maximalist/Hollywood/legacy industry camp. Instead, much of his work had been on the trademark front, and thus we'd hoped that maybe his focus would be more limited to issues around counterfeiting (which are also overblown in terms of actual concern -- but which have less of a free speech concern). After months of Congressional stalling, Marti was finally officially given the job a few weeks ago. And one of the first things he did was go give a speech at a "Creativity Conference" put on by the MPAA and Microsoft (yes, really), in which he appeared to repeat a bunch of horribly misleading, to downright wrong, talking points. In short, as a first impression, Marti is a disaster. Take a look:

After kicking off with a weak joke about his job title, he starts right in with the misleading talking points.

Summarizing my job, in the spirit of this conference, I think it's fair to say that the IPEC Office is the Executive branch's "creative conscience."

First of all... what? The role is enforcement, which has nothing whatsoever to do with actual creativity. In the past, with Marti's predecessor, Victoria Espinel, we often wondered why there was an "enforcement coordinator" at all, since the job title itself was so one-sided. If anything, if we were to go by the Constitutional rationale for copyright and patents, the role should be one in which it looks to see how best to "promote the progress of science and the useful arts." And enforcement is often not the best way to do that. In fact, as we've spent years demonstrating, enforcement can often harm the progress of the science and the useful arts. So it's interesting to see Marti suggest that his role is about being a "creative conscience." For a second, I thought that maybe this meant he'd actually consider what was best for creativity -- meaning all creators, not just the few who were lucky enough to be selected by the large legacy gatekeepers. But, no, as you'll quickly learn, by "creative conscience" he actually means "protector of a few legacy gatekeepers who often screw over actual creators."

Part of my job is to make sure that the administration keeps the impact on creativity top of mind when it adopts policies, makes decisions, and takes action.

Again, that's good if we're talking about actual creativity and all creators. But... he's not.

I'm also responsible for helping marshal the federal government's resources to help combat violations of intellectual property. Put simply, my office is dedicated to the protection of the American intellectual property system that helps drive our national economy.

And there we go, right off the tracks. He is focused on protecting the existing system -- even when it is shown to harm creativity, free expression and innovation. That's a problem. Maybe he didn't really mean that? Nope, he means it:

Let there be no mistake and no misunderstanding. Intellectual property is an integral part of the US economy. We're speaking of the spark of genius and the ideas behind transformative inventions, the artistry that goes into books, music and film. The trade secrets that preserve a company's market edge. Or the brands that distinguish our companies and their goods and services.

Already, he's making the cardinal sin of talking about intellectual property that we were just discussing: conflating the "property" piece with the underlying aspect of it. The spark of genius is not intellectual property. The ideas are not intellectual property. The artistry is not intellectual property. The brands are not intellectual property. The specific copyright, patents and trademarks may be property-like entities, but those are not the same thing as the underlying content, inventions or brands. As we noted in our piece about confusing those things, when you do that, your policy suggestions are going to be really, really bad. And you're going to make really silly statements like Marti does next:

Intellectual property helps create marketplaces that help drive economies, domestically and internationally. For example, the "core copyright industries" -- those whose primary purpose is to create, produce, distribute, or exhibit copyrighted materials -- added more than $1 trillion to gross domestic product and created and supported millions of jobs.

That's not true. We've gone through these numbers in the past, and shown how they're simply misleading and no one should be using them to make a serious point. They very broadly define the "core copyright industries" such that any industry that gets copyrights is determined to exist only because of copyright law. And that includes software firms that thrive on giving away services for free and that don't actually rely on their copyrights for anything. Besides, if you want to compare apples to apples, the IIPA who does the study that Marti is relying on, has shown that the "core copyright industry" isn't contributing nearly as much to the economy or economic growth as the internet economy is, and the internet economy is frequently held back by bad copyright laws.

Intellectual property-based industries are among the U.S.'s strongest exporters.

Well, sure, that's true if you argue that any company with a brand is an "intellectual property-based business," but that kind of thinking takes you down the path of arguing that grocery stores are an intellectual property miracle that only exist thanks to trademark law. And that's plainly ridiculous.

Overall, IP industries accounted for over 60% -- Six Zero -- of US exports.

Yes, but no one actually believes any of that is because of intellectual property laws, unless you conflate those laws with the underlying things, like brands.

The recorded music, motion picture, television and video, and software publishing businesses, for example, contributed to sales in foreign markets exceeding $156 billion dollars.

And how much of that is because of copyright law -- and how much of it is because it's content that people find valuable enough to purchase? Marti just ignores the distinction and lumps it all in because of copyright. Also, note, for someone who claims he's focused entirely on being the "creative conscience," his actual focus appears to be almost entirely on the commercial side of the creative ledger.

That is why it's so important to understand and protect IP, to foster legitimate trade, and to open foreign markets to US creative content.

That last one is a "I work for the President and need to give my shout out to the TPP and TTIP agreements" talking point. But, really, what did he say before that shows why it's "so important to understand and protect IP"? Frankly, I don't see anything. He talked a lot about big numbers, but nowhere did he show why strong intellectual property laws made those things possible. And nowhere did he consider that, maybe (just maybe) weaker IP laws may have actually enabled larger markets, or more creativity. That kind of thinking doesn't even enter the equation, which is kind of odd if you're positioning yourself as the "creative conscience."

Does he mention the importance of fair use in enabling creativity? Is he at all concerned about the lack of fair use in these trade agreements that supposedly will "open foreign markets" while stifling free expression?

Without understanding these things, for him to just automatically leap to the claim that we have to "protect" the existing system, it's difficult to take Marti seriously. He appears to be repeating talking points with no understanding at all of the underlying nuances.

The timing of today's event is fitting. Sunday is World Intellectual Property Day -- a global celebration of the role of intellectual property, of innovation, of creativity, in our daily lives.

Is it? Really? No, "World Intellectual Property Day" is a celebration of the legacy gatekeepers that take the copyrights of actual creative people, and push for expanding those laws with no thoughts towards the actual impact on creativity. And the creativity "in our daily lives" is frequently done without the use of intellectual property laws -- and, all too frequently, conflicts with those laws.

This year's theme is "Get Up, Stand Up. For Music" invoking Bob Marley and Peter Tosh's tune, to illustrate how song can serve as a call to action.... Bob Marley's song serves as an endearing, international anthem for human rights. Let us tap into this spirit, this call to action, to speak up for artistic communities, the world over.

Right. Like, remember that time that Bob Marley's family tried to reclaim the copyrights to two of his albums, including "Burnin'" where "Get Up, Stand Up" first was released? And remember how Universal Music fought that and won, so that Universal Music got to keep the copyright, as opposed to the Marley family? Thank goodness Universal still holds the copyright, or perhaps they would have had to pay Marley's family for the right to use that theme for this year's "World Intellectual Property Day," right?

Yes, ladies and gentlemen, Danny Marti is the US's "creative conscience"... for the giant multinational corporations against the actual creative folks out there. And, really, whose brilliant idea was it to use Jamaican music as a call for stronger IP laws -- when anyone even remotely familiar with the history of popular Jamaican music, knows that it involved rampant copying and remixing of others' songs, no concern about copyright at all (until foreign record labels jumped in and started divvying up the pie) and near endless creativity from that ability to remix and try new things. That's not exactly a ringing endorsement for stronger copyright laws.

And, again, if we're speaking up for "artistic communities, the world over," how about those who are being blocked from creating new works due to overbearing copyright laws? How about those who are being sued for having a song that has a similar feel to another song? Do they count?

Let us stand up for art. Let us stand up for the artist. Let us stand up to respect the artist's right to make a living off of his or her artistic labor.

Yes, unless you're Bob Marley's family. Then let us stand up for Universal Music's right to go to court to block the Marley family from that right! Or, unless you're a remix artist creating wonderful new songs by building on the works of the past.

Also, where in the constitution does it say that anyone has a "right to make a living off of his or her artistic labor?" I have many friends who "labor" quite hard in making music, but don't make livings from it. Should I send them to Marti to solve that? Will he "marshal the federal government" to make sure they make a living?

Because this is another nefarious myth. You have no "right" to make a living from your labor. People might just not value it enough to pay for it. Or you might not be offering it in a format that people will pay. What about my friends who were journalists over at GigaOm, which recently went out of business? They were creating many written words, and laboring very hard at it. But the company went out of business. But if we believe they have "a right to make a living" from their creative labor, shouldn't they be guaranteed a living? Everyone knows that's crazy. So why do we repeat the myth when it comes to music? Most musicians -- in fact, nearly every musician -- has never "made a living" off of their music. Only a very few have. And it's not because they had a "right" to make a living.

And let us stand up to forcefully reject those who believe that the theft of one's creative output is somehow acceptable. It is not.

Of course, we're back to the misleading use of "theft." Do we consider what UMG did to Bob Marley's estate "theft"? Someone should ask Marti. Does he consider Pharrell and Robin Thicke writing a song with a similar "feel" to a Marvin Gaye song as "theft"? Does he consider a woman posting a 30-second video of her child dancing to a Prince song "theft"? Does he consider artists like Kutiman as theft? Does he consider artists like Led Zeppelin and Bob Dylan -- many of whose greatest works where near note-for-note replicas of others' songs -- engaged in theft?

Because any honest discussion of creativity and intellectual property laws has to be able to take into account all of these situations, and the word "theft" doesn't really cut it -- which is also why that's not what the law says. You'd think that the guy whose role is to help enforce the law would understand that copying a song isn't "theft." It's worrisome that he does not.

When we speak of the role of creativity in our lives, we're also speaking about human expression, building communities. The sharing of stories -- whether through print, music or film -- brings people together, fosters discussion, builds bridges and helps create common identity.

Of course, if that "discussion" or "common identity" strays too far, such as in creating a derivative work, that may be seen as infringement (or in Marti's world "theft") and thus he will "marshal the forces of the federal government" to bring you down. All in an effort to protect the glorious markets of the creative conscience.

Our digital lives have only helped to accelerate these discussions, bringing people together and bringing their stories closer.

And, because of that, the US government has been actively shutting down websites where those discussions happen and pushing for laws to throw the operators of the websites in jail.

And in order to further that, we must strive to build not only an open internet, but a safe, secure and stable one.

In other words, not really an open internet. But one that is limited and controlled by multinational gatekeepers. Either way... I feel that we're rapidly approaching the administration's favorite buzzword. I know it's coming, I just know it... and...

One way the administration is seeking to do just that is by fostering multistakeholder processes in which all participants in the ecosystem -- government, the private sector, and civil society -- can play a role in encouraging positive internet behavior and marginalizing anti-social and, indeed, criminal behavior.

Multistakeholder! Bingo! What do I win? Oh, someone now arguing that rather than encouraging freedom of expression and an open internet, we should try to look for ways to stamp out "anti-social behavior" online. Hmm. Anti-social behavior? Wouldn't that bar songs like "Get Up, Stand Up" that could be seen as "anti-social" in encouraging the public to stand up for their own rights when they are being taken away from them by their government? Rights like freedom of expression?

Protecting and advancing a community starts with action by its members. We need to stand up for what is good and reject what is unfair.

I think freedom of expression is good. I think shutting down websites that were blogging about music is unfair. I think that supporting programs for site blocking, that take down free speech, is unfair. I think a system that prioritizes the ability of large multinationals to block innovation is "unfair." Yet, these all seem to be things that IPEC supports.

Stakeholder responsibility will create an environment conducive to creativity.

Let me translate this for you: "Search engines should start censoring sites that the MPAA dubs "unfair" because they challenge the MPAA's business model."

It will benefit those who make a living producing creative works.

Unless, like Dan Bull (who makes his living producing creative works), you relied on sites like Megaupload to distribute those works and the US government shut it down.

It will benefit those who enjoy those works.

Unless you no longer have access to them, thanks to US courts censoring them.

Respecting IP not only encourages creativity, it also promotes the technologies for communicating that creativity. This bears repeating. Respecting IP not only encourages creativity, it also promotes the technologies for communicating that creativity.

How? This is a serious question, but I'd like someone to answer it, because history doesn't come even remotely close to supporting that claim as can be seen by Marti's next ridiculous statement:

The desire to tell stories to even wider audiences in even more vivid ways, has a long chain of technological innovation, creating new industries along the way. From printing, to radio, to film and television, and now, of course, the internet economy.

And each and every single one of those was decried initially by the legacy forces -- the gatekeepers who controlled the previous industries. The printing press was in a time before copyright, but obviously shook the very foundations of society by helping to break it out from Church control. The radio resulted in a massive legal fight as the record labels tried to kill it in its early days. The film industry moved to Hollywood to avoid enforcement of the patents of Thomas Edison, and often relied on copyrighting the innovations of others in the industry. When television came along, the film industry also freaked out and tried to hamper it -- especially innovations like the VCR. And, of course, the internet. We've had lawsuits against search engines, video platforms, MP3 players, book indexes and more. If we "respected" IP in the terms of the legacy gatekeepers, we'd have none of those innovations.

Look, I get it: Marti's very job description basically says that he needs to take on the role of propping up the interests of the legacy gatekeepers. But, at the very least, his predecessor, Victoria Espinel, seemed willing to recognize that there was a lot more to what was going on than the one-sided version of history presented by those gatekeepers. Espinel was at least open to the idea that too much IP could create more problems than good things. Marti shows no sign of this recognition, and seems so thoroughly bought into a single world view of intellectual property that he didn't even realize just how ridiculous it was for anyone in the "intellectual property" world to cite Bob Marley as a good example of supporting creators.

So go on, Marti, "Get Up, Stand Up!" but recognize that what you're standing up for, is not for the "creative conscience" or for creators themselves, but those who seek to be gatekeepers on that creativity.

from the that's-not-how-the-law-works dept

TorrentFreak has the exceptionally troubling story of a federal district court in Oregon issuing an incredibly broad and questionable order, effectively wiping a bunch of websites out, without ever letting the websites in question know that they were being "tried" in court. The request came from ABS-CBN, a giant Filipino entertainment company arguing infringement, of course. But the argument against these sites is somewhat questionable already, made worse by the demand that the whole thing be done under seal (without alerting the site operators). Then Judge Anna Brown granted the temporary restraining order, basically deleting these sites from the internet, without even a sniff of an adversarial hearing.

You may recall that the entertainment industry insisted that SOPA was needed for exactly these cases -- overseas sites they claimed were "rogue" sites dealing in infringement. They claimed there was no way to take them down. And, even SOPA had more limitations than what Judge Brown allowed here. If you have rogue judges like Brown issuing orders like this, who needs SOPA. It's already in place in her view of the world.

The complaint itself is raising some questions, as it makes long-debunked claims such as saying that the sites use of "meta tags" boost how the sites show up in search engines. That may have been true in the 90s, but it hasn't been true for over a decade, at least. Further, the complaint argues that the site operators have some sort of proactive requirement to "implement means to prevent infringement," but the law requires no such tools or filters -- only that the sites properly respond to takedown notices for copyright infringement (trademark is a bit different, but the trademark claims here are also quite weak).

The filing was done under seal based on the bogus excuse that if the sites operators were alerted they might be "tipped off" that something was happening and make an effort to prevent the sites from being shut down. We'll get into why that goes against Supreme Court precedent and the First Amendment in a moment, but first let's look at how broad and ridiculous the actual restraining order is. The judge grants the restraining order against the defendants ordering them to stop making use of ABS-CBN trademarks and copyrights, which isn't too surprising. But then stretches the order to include tons of non-parties to the lawsuit:

Upon Plaintiffs' request, those with actual notice of the injunction, including any Internet search engines, Web hosts, domain-name registrars, and domain name registreies or their administrators, shall cease facilitating access to any or all domain names and websites through which Defendants engage in the (i) copying, distribution, performance, and promotion of Plaintiffs' copyrighted works and\or broadcast content or (ii) use of the ABS-CBN Marks

It also orders domain registrars to hand over the domains to ABS-CBN and to block further transfers. Again, all of this is done without ever notifying the defendants, who are named as Jeffrey Ashby, Lenie Ashby and a bunch of Does operating a variety of domain names.

The ruling is extremely questionable. The whole reason why the entertainment industry pushed so hard for SOPA was because they knew you couldn't pull a stunt like this. It seems that Judge Brown doesn't know about this or doesn't care. That's what happens when you only hear one side of an argument in a case. However, as we've discussed in the past, such one sided rulings that shut down entire websites with no notice to the operators of those websites, are illegal under the Supreme Court's ruling in Fort Wayne Books v. Indiana. When it comes to any sort of expressive content, the court held that seizing the content prior to an adversarial hearing violates the First Amendment:

In a line of cases dating back to Marcus v. Search Warrant, 367 U. S. 717 (1961), this Court has repeatedly held that rigorous procedural safeguards must be employed before expressive materials can be seized as "obscene." In Marcus, and again in A Quantity of Copies of Books v. Kansas, 378 U. S. 205 (1964), the Court invalidated large-scale confiscations of books and films, where numerous copies of selected books were seized without a prior adversarial hearing on their obscenity. In those cases, and the ones that immediately came after them, the Court established that pretrial seizures of expressive materials could only be undertaken pursuant to a "procedure `designed to focus searchingly on the question of obscenity.' " Id., at 210 (quoting Marcus, supra, at 732). See also, e. g., Lee Art Theatre, Inc. v. Virginia, 392 U. S. 636 (1968).

We refined that approach further in our subsequent decisions. Most importantly, in Heller v. New York, 413 U. S. 483, 492 (1973), the Court noted that "seizing films to destroy them or to block their distribution or exhibition is a very different matter from seizing a single copy of a film for the bona fide purpose of preserving it as evidence in a criminal proceeding." As a result, we concluded that until there was a "judicial determination of the obscenity issue in an adversary proceeding," exhibition of a film could not be restrained by seizing all the available copies of it. Id., at 492-493. The same is obviously true for books or any other expressive materials. While a single copy of a book or film may be seized and retained for evidentiary purposes based on a finding of probable cause, the publication may not be taken out of circulation completely until there has been a determination of obscenity after an adversary hearing. Ibid.; see New York v. P. J. Video, Inc., 475 U. S. 868, 874-876 (1986).

Thus, while the general rule under the Fourth Amendment is that any and all contraband, instrumentalities, and evidence of crimes may be seized on probable cause (and even without a warrant in various circumstances), it is otherwise when materials presumptively protected by the First Amendment are involved. Lo-Ji Sales, Inc. v. New York, 442 U. S. 319, 326, n. 5 (1979). It is "[t]he risk of prior restraint, which is the underlying basis for the special Fourth Amendment protections accorded searches for and seizure of First Amendment materials" that motivates this rule. Maryland v. Macon, supra, at 470. These same concerns render invalid the pretrial seizure at issue here.

And yet... the judge appears to ignore that entirely. That's incredibly troubling for the precedent it sets. It may very well be true that the sites in question were engaged in infringing activity and deserve to lose any lawsuit filed against them. But it's also possible that they were not engaged in such activities -- and yet their sites are preemptively shut down and destroyed, without them even knowing there was a legal proceeding under way. That's prior restraint.

I actually spoke to Rob Holmes, an "intellectual property cybercrime consultant" who is working with ABS-CBN in this case. Holmes is a Techdirt reader and someone whom I've had good discussions with on related subjects in the past -- but he's obviously defending this ruling. As he told me:

The subjects will have plenty of opportunity in the near future to defend their actions. We proved beyond a shadow of a doubt that they were bad actors and, rightfully, the judge made us work hard to prove it.

The reason a case is filed under seal is so that the criminals do not have time to put a contingency plan into action. Otherwise our efforts would not be effective. It's no different than conducting a raid on a crackhouse. This operation is not only making financial profit from their piracy, but their ads contained malware that infected the computers of all of their users. They are also employing other black-hat techniques in attempts to make money.

You know my case history. The whack-a-mole game is a scam for all involved. From an IP enforcement standpoint, when someone messes with your company's livelihood, you stop them. And you make sure that all watching are discouraged. Period.

I have to take issue with nearly everything that Rob says here. The fact that they'll have plenty of opportunity after the fact to dispute the charges against them is besides the point. Who knows if this is a legitimate operation or not, but if it is, and this action totally destroys it, then it's a bit late to go and complain to the courts after it happened. The whole point of the Supreme Court ruling discussed above is that you have to have an adversarial hearing first. The whole "contingency plan" argument is bogus as well. Any action required in the restraining order could easily be issued at a later date against any other sites that these individuals happen to set up as well.

Rob's comparison of this to a "crackhouse" and calling them criminals is also dangerously misleading. First, this a civil, not criminal case. Second, as the Supreme Court noted, when you're dealing with things like drugs, it's reasonable to seize it. When it's expressive material, you can take or copy a single example for the purpose of evidence, but you cannot shut the speech down. But that's what the judge did here. The claim that the case "proved beyond a shadow of a doubt" that they were bad actors is simply laughable as well. Again, only one side of the story has been told here, and already in the complaint itself there are highly questionable arguments (such as arguing that the sites had a requirement to take proactive action against possible infringement).

Whether or not you have to "play whack-a-mole" (and as a trademark expert, Rob should know that it's actually whac-a-mole) to stop scammers that does not remove the rights of those who operate the sites. And those rights include the First Amendment and the right to an adversarial hearing before expressive content -- websites -- are taken out of commission.

Who knows if the site operators will really fight back here. They may not. They may, in fact, be engaged in infringement and not wish to challenge any of this in court. But, even so, that doesn't change the massively problematic nature of this move by ABS-CBN, and the denial of basic due process and the First Amendment to the operators of those sites. People have rights for a reason. We don't just stomp them out without due process just because one party has told a court that they're "bad actors."

from the good-to-see dept

For many years we've vocally criticized a very questionable line of arguments made by various lobbyists and (tragically) the US Commerce Department, that if you look at so-called "IP intensive industries" and see that those industries employ lots of people and are often profitable, it therefore means that stronger copyright, patent and trademark laws are good for the economy. There are all sorts of problems with this argument, highlighted simply by the fact that the single largest employment listed in one of these studies for an "IP intensive" industry is grocery stores. It's somewhat comical to believe that grocery stores employ 2.5 million people because of trademark law.

When challenged on this, the US Commerce Department's incredibly weak defense of this kind of argument (i.e., "Steve Jobs had patents, Steve Jobs made cool things, ergo, patents are important to innovation") was certainly troubling.

Thankfully, a new report by Eli Dourado and Ian Robinson at the Mercatus Center at George Mason University does a nice job dismantling most of the claims in these series of reports that suggest that lots of jobs in "IP intensive industries" automatically means "strong intellectual property laws are good." The report starts out by simply highlighting the problem of generally using "jobs" as a proxy for "good for society." That's a fallacy, and often a problematic one for innovation (where disruption may initially destroy a bunch of jobs, but, in the long-term, create many new opportunities).

Perhaps most fundamentally, jobs are not ends in themselves, and counting the number of jobs created is therefore not the best way to evaluate a policy. As Bryan Caplan notes, “Economists have been at war with make-work bias for centuries. [19th-century French economist Frederic] Bastiat ridicules the equation of prosperity with jobs as ‘Sisyphism,’ after the mythological fully employed Greek who was eternally condemned to roll a boulder up a hill.” Economic progress, Bastiat says, is defined by an increasing ratio of output to effort—indeed, economic nirvana is achieved when there is high output and zero labor effort.

Lawmakers could create jobs by requiring that construction projects be performed with spoons instead of shovels or tractors. Such a policy, however, would reduce worker productivity and decrease total economic output. Consequently, this spoon mandate would not promote economic progress.

Likewise, some of the jobs created by IP may harm the economy instead of helping it. Suppose IP laws necessitated that every firm hire 10 additional IP lawyers, but otherwise left output unchanged. IP could be said to create millions of additional jobs, but these would be jobs that reduced real output per worker, jobs that moved society further away from economic nirvana. They should be reckoned as economic costs of IP, not economic benefits. If (counterfactually) this were the only effect of IP, then abolition of IP would mean that the effort of the heretofore unproductively employed IP lawyers could be redirected to more productive uses.

But of course, the bigger issue, as we've outlined, is the silly argument that these jobs exist because of strict intellectual property laws. Not a single one of these studies has looked at how the jobs change with changes in the law. It simply is ridiculous to naturally assume that most of these jobs (like the grocery store point above) exist because of the current laws.

As a reductio ad absurdum, consider the blogging “industry.” As a matter of law, all authors are automatically, without registration or any other formal notice, bestowed with a copyright in their blog posts. Since the entire output of the blogosphere is copyrighted, under IPUSE’s methodology it would qualify as an IP-intensive industry (if it were considered an industry). Nevertheless, it seems clear that copyright protection accounts for at best a tiny sliver of bloggers’ output—the vast majority of blogs are accessible without a paid subscription, and many bloggers do not attempt to monetize their posts (with ads, say) at all.

If some industries resemble blogging—for example, if copyrights are automatically awarded but not relied on, or if patenting is done for primarily defensive purposes, or if trademarks exist but are rarely relied on by consumers—then IPUSE and the other reports that rely on simplistic counts of IP grossly overstate the number of jobs due to intellectual property. For these industries, IP intensity is not a reliable indicator of IP dependence.

On a similar note, for years we've pointed to CCIA's reports that did such a great job highlighting this fallacy by using the identical methodology to define "fair use intensive industries" to show that based on the copyright industry's own bogus methodology, clearly fair use is "more important" than copyright since it employs more people -- and thus, if we were to believe the original reports, then we should clearly expand fair use (massively, since it's so limited today). The whole point of the report was to mock the silly claims about "copyright intensive industries" -- and, amazingly, those who supported one report were horrified by the fair use report, attacking the methodology, without the self-awareness to recognize they were mocking their own preferred methodology.

As the report also notes, many of these other reports on how "important" IP is assume that intellectual property is the sole incentive for these jobs and related innovations and progress. That's just silly. As the new report notes, there are lots of possible impacts that these studies don't even remotely account for:

As a general matter, intellectual property law can overprotect as well as underprotect. When it overprotects, it creates jobs without a corresponding increase in real output, it creates jobs by destroying other jobs that are not accounted for, and at the margin it accounts for very little of the actual output created by supposedly IP-intensive industries.

The report then goes on to explore each of the three key areas -- copyrights, patents and trademarks -- to show why the assumptions underlying many of the reports simply don't hold up under scrutiny. It's a useful addition to counteract the bogus studies that make the bogus correlation argument based on the broadly defined "IP-intensive industries." If I have one complaint about it, it's that the report doesn't go as far as I expected, based on the title: "How Many Jobs Does Intellectual Property Create?" When I started reading the paper, I expected an attempt to actually look for some sort of causal methodology to determine such a figure, rather than just a dismantling of the arguments of those other reports. It's still a useful bit of research and analysis, but the title overpromises a bit.

from the clown-shoes dept

Can't we all just drink along? Apparently not, as I seem to keep finding more and more nonsensical intellectual property cases related to sweet, beautiful alcohol. Who would have thought that beer could so often lead to confrontation? You may recall times when the IP and alcohol realms have clashed in the past, often over the designs of labels, sometimes over the names of real life people, and sometimes over the trademark of an (sigh) area code.

And now we can add mythical monster disputes to the ledger, as reader phlynhi writes us about a small brewer of beer, Clown Shoes, and how they lost the name of their signature beer, Vampire Slayer. The story goes like this. Clown Shoes made a beer and called it Vampire Slayer. A company called TI Beverage Group released a beer called Vampire Pale Ale after Vampire Slayer came out, but had applied for a trademark before Clown Shoes did. Rather than sending any cease and desist notices, they filed a trademark claim out of the gate, insisting that the court rule unfair competition and that any profits from Vampire Slayer be turned over to TI Beverage Group. Lovely.

Per Clown Shoes' website, they decided that the brand confusion at the heart of the case was a claim they could beat.

At the heart of the suit, we learned after seeking counsel, is whether or not a likelihood of brand confusion exists. Our position was that there couldn’t be much confusion between the two brands. The beers come from different countries, with ours being made in the USA and theirs in Belgium. This means they will end up in different sections of any beer store or on any beer list. Vampire Pale Ale embraces vampires in name and imagery, whereas Vampire Slayer does the opposite. Clown Shoes is the primary name of our beer, whereas Vampire Slayer is the secondary. The beer styles, American Imperial Stout as opposed to Belgian Pale Ale, are about as different as possible. Clown Shoes Beers’ branding is very distinct from Vampire Pale Ale. Etc.

Seems to make sense to me and Clown Shoes was ready to go fight their case in court. Then their attorney informed them that litigating would likely run anywhere between $300k and $400k. Yay, legal system! So they settled, resolving the case for an undisclosed amount of money and a resulting licensing agreement that would allow Clown Shoes to keep using the Vampire Slayer brand name if they choose to. They decidedly choose not to.

Immediately after we receive national label registration, the name Vampire Slayer will become Undead Party Crasher. The recipe remains the same, with smoked malt and holy water included. The new label expresses our feelings about the legal process and monsters.

Just remember, double tap to the head or sever the head from the neck. It's the only way to stop them. Zombies I mean....

from the and-they're-using-it dept

There's a very cool group out there called the Hacker Scouts, which was started last year, trying to get kids interested in cool hacking stuff:

Hacker Scouts is a national non profit organization, founded in the Fall of 2012 in Oakland CA, that focuses on STEAM (science, technology, engineering, art, and math) education, skill building and community engagement with the aspiration to help our children develop skills in the areas they are truly interested in, abilities that would allow them to dream big and create big. A variety of experts and mentors from the community ensure a well rounded and high level of attention and skill building for all ages through accessible programs that meet the different needs of our young makers. Hacker Scouts provides open source material and a support program for Hacker Scout programs globally.

For the past several months we have been dealing with an issue that we now feel is at a point where it is important to let you know what is going on. A few months ago, we received a Cease and Desist letter from the Boy Scouts of America when we tried to trademark our name. Through various letters, we have tried to quietly come to a compromise, but the BSA position is clear: change our name or they will take us to court.

This is a difficult situation for us. We believe in our name and our right to use the word "scouts". The BSA's main argument is that they have a constitutional charter that they interpret to mean they have the right to use and trademark any word they choose. We disagree. We believe the charter itself may be unconstitutional, and that "scouts" is a world-wide connotation for a youth organization that existed before them and will exist long after them. We have also tried to be very clear in our message that we are not affiliated with the Boy Scouts nor are we trying to replace them. We do not offer the same experience, nor do we have a similar model as they do. We did not base our organization on them.

So, apparently, the Boy Scouts are trademark bullies. There's no likelihood of confusion here, and the idea of dilution based on the use of the common word "scouts"? Seems ridiculous.

Except... lawyer Ron Coleman dug into things a bit and discovered that Congress, stunningly, has actually passed a special law just for the Boy Scouts that allows them to be trademark bullies. No joke. It's 36 USC 30905, which is a part of 36 USC 309, which is a law just for the Boy Scouts of America. In 30905, the Boy Scouts appear to be given full "exclusive right" to "emblems, badges, descriptive or designating marks, and words or phrases the corporation adopts." This goes way, way beyond what traditional trademark law allows, and the Boy Scouts appear to be using it to their trademark bullying advantage.

In fact, Coleman cites a case, Wrenn v. BSA from 2008, in which the court flat out said:

BSA need not demonstrate the likelihood of confusion because it has been granted special protection by Congressional charter

So, there you go. Stunningly, and ridiculously, the US government has given the Boy Scouts of America free reign to be obnoxious trademark bullies, threatening and going after anyone who uses "scouts" even if there's no likelihood of confusion at all.